Redwood City Seeing Some of the Highest Price Increases in the Peninsula
Similar to other areas of the Peninsula, prices are rising sharply in the Redwood City real estate market. However, the rate of change in Redwood City is one of the highest we have seen with the data suggesting that prices are up 15%, if not 20%, in the past 12 months. The 12 month moving average values for average prices, median prices and average price per square are up between 16% to 21% since March 2012.
The most recent pricing related highlight was actually in March 2013. The average selling price was over $1 million in Redwood City for the first time since March 2008. In fact, it was the first time over $950,000 since July 2008. While one month does not make a trend, anecdotes like that are confirming markers of the broad based price increase.
One can also see the recent upswing by looking at the average price per square foot. In 2013 homes in Redwood City have sold for an average of $571 per square foot. In the first three months of 2012, the average home sold for $452 per square foot, an increase of 26%!
Prices are rising due to the same "Economics 101" supply versus demand issues seen up and down the Peninsula (and in many areas of California and the nation). A relative healthy local economy means that there are a lot of buyers. At the same time, the supply of for sale homes is dwindling. Redwood City has seen some of the sharpest drops in inventory in San Mateo County, which is probably a factor in the extra high price increases.
At the end of March 2013, there were 46 unsold homes on the market in Redwood City. One year prior, there were exactly double the number of available homes for sale, 92. Going back one year further, the supply of for-sale homes nearly doubles again, to 168 unsold homes. Prospective buyers in March 2013 have about 1/4 as many homes from which to choose. Given that the number of interested buyers has probably been increasing, you get a classic case of excess demand leading to higher prices.
Sales Down in 2013 (Lack of Inventory)
Through the first three months of 2013 there have been 101 homes sold in Redwood City, down by 30 from the 131 homes sold in the first three months of 2012. Sales are down due to a lack of inventory, not a lack of buyer demand. There has been about 30 fewer newly listed homes to start the year than there were in 2012 and baseline inventory levels are half of what they were a year ago.
If the current listing and inventory trends follow the pattern set forth in the first part of the year, sales activity will almost certainly fall compared to 2012. At the current rate, there were will be 554 new listing in 2013 (as compared to 676 in 2012, not to mention 763 in 2011). There are 46 currently unsold homes. Back of the envelope suggests that even if every new listing were to sell and the entire stock of inventory were sold (which won't happen simply because some sellers change their minds), there would be a max of about 600 sales in 2013. There were 599 sales in 2012. Unless there is a bump in new listings in the summer, expect there to be fewer sales in 2013 than there were in 2012, even though the demand from buyers is stronger than the prior year.
By The Numbers - Redwood City Real Estate for 2013
|Current Month||YTD Total or Average|
|March 2012||March 2013||Jan - Mar 2012||Jan - Mar 2013|
|Days on Market||46||40||54||33|
|Months of Supply||1.6||1.1||2.1||1.4|
|Avg $ per Sq Ft||$450||$590||$452||$571|
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